A group of shareholders claimed that the mean tenure for a CEO was at least nine years. A survey of 81 companies found a sample mean tenure of 7.9 years with a standard deviation of 6.4 years. Using the p-value approach, perform the appropriate test at ?=0.10.

Suppose that the owner and CEO of a firm that operates in a PERFECTLY COMPETITIVE market environment comes to see you for help. She has question to ask you as her best Economist friend.

(i)    After talking to another economist friend, Mary, my question, she says, is: “And then this morning Mary said that after the market responds to our current extra-ordinary economic profit, that we may be in a position where our Total Revenue, TR is less that our Total Cost, TC. I said that was awful, we would have to Shut Down! But Mary said, no we won’t because our Total Revenue will still be greater than our Total Variable Cost, TVC. Can you explain WHY this result matters to me and what I should do, please?

Can you please explain the answer thoroughly and in detail for my understanding?

Imagine yourself as the CEO of a large firm in an industry in which you are interested. Please (1) identify major trends in the general environment, (2) analyze their impact on the firm, and (3) identify major sources of information to monitor these trends

Suppose that you are the CEO of a discount airline that caters to students on tight budgets who want to travel to warm locations when the weather gets cold. Currently, your airline flies small regional jets from the MBS International Airport to 6 cities in Florida. Assume that your airline has a monopoly on the local market.

1. List the conditions that apply to monopolies, and briefly describe how they apply to this airline. (6 points)
2. Using the table below, determine the profit maximizing number of passengers that you should serve out of the MBS market. The price is for a round-trip ticket. (8 points)

3. Suppose that your fixed costs are $50,000, and your variable costs are $100 per passenger. Would you ever consider shutting down the airline? At what point would you do this and why? (8 points)

3. Suppose that your airline was competing with 3 other airlines for the passengers wanting to fly to Florida. How would you determine what fare to charge? Would you collude with your competitors? Why or why not? (8 points)

Suppose that you are the CEO of a discount airline that caters to students on tight budgets who want to travel to warm locations when the weather gets cold. Currently, your airline flies small regional jets from the MBS International Airport to 6 cities in Florida. Assume that your airline has a monopoly on the local market.

1. List the conditions that apply to monopolies, and briefly describe how they apply to this airline. (6 points)
   
2. Using the table below, determine the profit maximizing number of passengers that you should serve out of the MBS market. The price is for a round-trip ticket. (8 points)

3. Suppose that your fixed costs are $50,000, and your variable costs are $100 per passenger. Would you ever consider shutting down the airline? At what point would you do this and why? (8 points)

3. Suppose that your airline was competing with 3 other airlines for the passengers wanting to fly to Florida. How would you determine what fare to charge? Would you collude with your competitors? Why or why not? (8 points)

Question 5:

The CEO of a small firm believes that there is a relationship between the number of client contacts and the dollar value of sales. To document this assertion, she gathered the following sample information. The X column indicates the number of client contacts last month, and the Y column shows the value of sales ($ thousands) last month for each client sampled.

(a) What is the correlation between Y and X?

(b) Determine the coefficients (i.e., the a and b values) of the regression equation Y = a + bX .

(c) Interpret the values of a and b.

(d) Using the estimated regression equation, determine the estimated sales if 45 contacts are made.

Nike was sued by Adidas for infringing on their patent for running shoes. The CEO of Nike is confident that they will win the case, but the firm is spending $1 million per year on this litigation and it will go on for 4 more years. The interest rate is 5%. Suppose Nike wants to stop dealing with the distraction, how much would Nike have to pay an external firm to take full responsibility of the case? Assume that Nike’s legal department is as equally productive as an outside firm and that the market for outside legal help is perfectly competitive. Also assume that the payment for legal services will be made at the beginning of each year.

a. XYZ Inc. is accused of being a monopoly. The CEO claims that it’s not a monopoly, arguing that if XYZ were to raise its price it would lose sales. This is because consumers always have the option to spend their money on other goods. Is the CEO’s argument persuasive? Explain (6 pts.)

b. (Unrelated to the above) A monopoly firm is currently maximizing profit, earning economic profit of $10 million per year. It is now successfully sued by a former employee who is awarded $1 million. A manager of the firm argues that to recoup the lost $1 million, the firm needs to raise its price. Do you agree? Explain. (6 pts).